Sesa Sterlite Restarts Iron Ore Mines Easing Supplies in India

By Abhishek Shanker -
Dec 30, 2013

Sesa Sterlite (SSLT) Ltd., which won
approval to restart its iron ore mines in Karnataka, will
increase production of the raw material from the southern state
by 14 percent a year, easing supplies to local steelmakers.

The company, controlled by billionaire Anil Agarwal,
received clearance from a committee appointed by the nation’s
top court to produce as much as 2.29 million metric tons of the
raw material a year, Executive Director Prasun Kumar Mukherjee
said today. Output in the three months to March may reach 1.2
million to 1.5 million tons and can be sold through electronic
auctions, he said.

The resumption will help ease iron ore shortages faced by
local steelmakers including JSW Steel Ltd. (JSTL), India’s third-biggest producer of the alloy. Iron ore miners in the southern
state are producing a little more than half of the 30 million
tons needed annually after the top court partially lifted the
ban imposed on environmental grounds.

“There is enough local demand for iron ore and the prices
are good,” Mukherjee said today in a phone interview. “We will
sell the ore through online auction and also use some ore for
our own needs.”

Shares of Sesa Sterlite, also India’s biggest aluminum,
zinc and copper producer, rose as much as 3.7 percent, the most
since Dec. 16, to 208.80 rupees and traded at 203.55 rupees as
of 10:12 a.m. in Mumbai. The benchmark S&P BSE Sensex fell 0.1
percent.

Iron ore mining accounted for 98 percent of earnings at
Sesa Goa Ltd., which in August merged with group company
Sterlite Industries (India) Ltd. to form Sesa Sterlite.

The nation’s top court, which also banned mining in the
western state of Goa, said in April Sesa needs the consent of
federal and state governments to commence operations. Sesa,
which got India’s environment ministry approval in August, also
met all requirements for a permit to extract the raw material,
two officials familiar with the matter had said in October.